LINEAR REGRESSION.

A computer company sells personal computer supplies, software, and hardware. management is currently examining the distribution process from the company's wareho and is Interested in studying the factors that affect warehouse distribution costs. Data been collected over the past 12 months, indicating the warehouse distribution c (RM'000) and the number of orders received. The data collected is shown below. Months Distribution Cost ( RM'000) Number of Orders 50 40 70 55 85 60 $5 42 70 50 70 55 55 30 70 52 80 58 10 75 11 70 55 12 55 35 The computer output is shown below. The rogression equation is distribution cost - 22.1 + 0. 932 number order Predictor Ceer SE conf Constant 22. 072 7,239 3.05 0.012 number order 0. 9324 0. 1446 6-45 0.900 5 - 4.76742 R-59 80. 60 R-Sqladj) = 76. 76 Analysis of Varlance DE F Source 1 945.63 41.61 0.000 Regression 945.63 22.73 Residual Error 10 227.28 Total 11 1172.92Based on the computer output, answer the following questions: State the independent and dependent variable. (2 marks State the equation of the regression line. (2 marks Interpret the value of the slope of the regression line. (3 mark Calculate the correlation coefficient between distribution cost and number of order Interpret the result obtained. (3 mark Determine the value of the coefficient of determination and explain its meaning. (3 mar Estimate the distribution cost if the number of orders is 50. (2 mar Perform a test to determine whether the linear regression model is significant or Use 5% level of significance. 15 ma11. Using linear regression analysis, Empire Roofing Company estimated its demand function for flat rolled roofing and achieved the following results: Q- = 244 -.1057P -1.35P+ .0251 where: QR # quantity in thousands of square feet per year = price in thousands per roofing job Pc price of a competing company's average bid (in thousands) H = average annual household income a. How can Empire use this information to find its price, income and cross price elasticity of demand? b. Can you think of a potentially important variable that Empire has ignored in its demand analysis? c. If P. = 125 and P. =110 and average income is equal to $25,000 what is the estimated income elasticity value